Chapter: Financial Planning· Mathematics Part 1 (Algebra)

A wholesaler sold an article to a retailer for a taxable value of ₹ 5,000. The retailer sold it to a customer for a taxable value of ₹ 6,000. Rate of GST is 12%. Find the GST payable by the retailer, and the CGST and SGST in it.

Q.21 A wholesaler sold an article to a retailer for a taxable value of ₹ 5,000. The retailer sold it to a customer for a taxable value of ₹ 6,000. Rate of GST is 12%. Find the GST payable by the retailer, and the CGST and SGST in it.

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Answer: GST payable by retailer = ₹ 120 (CGST ₹ 60, SGST ₹ 60)

Input tax of retailer = 12% of 5000 = \(\dfrac{12}{100} \times 5000\) = ₹ 600, so ITC = ₹ 600.

Output tax of retailer = 12% of 6000 = ₹ 720

GST payable = Output tax − ITC = 720 − 600 = ₹ 120

CGST payable = SGST payable = 120 ÷ 2 = ₹ 60 each.

Note: the retailer pays tax only on the value he added (₹ 1,000), because 12% of 1000 = 120.

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A wholesaler sold an article to a retailer for a taxable value of ₹ 5,000. The retailer sold it to a customer for a taxable value of ₹ 6,000. Rate of GST is 12%. Find the GST payable by the retailer, and the CGST and SGST in it.

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